The tomato growing business has become lucrative to most farmers but also detrimental to some, as most farmers do not make a conscious approach towards the business side of growing tomatoes.
When I started farming, the first thing I thought of growing was tomato. I mean everyone was growing them. So many farmers were offering inexpensive training sessions and it seemed like the best route to take. I thought hard about this cash cow of tomato farming and unfortunately, I had to also look the downside of tomato farming. The price sensitivity of this product can either make you a lot of money or leave you broke.
The selling price of tomato fluctuates between K450 per crate and can go as low as K6 per crate. I had to reconsider. It dawned on me that as a start-up farming operation, I need to avoid growing tomatoes for this reason. My business plan gravitated more towards other vegetables that were less price sensitive which was easier for me to plan my cashflows and net out a steady investment outlay. I have come to realise now that the decision was prudent as some farmers in my area who were tomato Guru’s are now wallowing in the reality of this business. Not to discourage any would be tomato farmers but to offer a conscious realisation to the risks involved in aiming for this route earlier in ones farming operation.
Due to the price sensitivity of tomatoes, it makes it difficult for one to project or plan in forward motion as the market for the crop where most farmers are selling it off are not established markets that can provide a forward contract with a guaranteed price hence the risks associated with such arrangements cannot secure planned revenues.
My humble advice to individuals starting up would be to simply grow your business first to a level where you can be in a position to spread the risk across different commodities grown on the farm and also find markets that can guarantee a certain price. If you’re looking for other crops to grow during this period, consider potatoes, cabbages, red and green peppers, watermelon and butternuts. I know input costs may vary but will be safer.
I bid you more prosperous decisions in your farming endeavours.
By Steven Kayola
And all the best as we fight the coronavirus!